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Circular issued on the carry forward of tax losses
Recently, the Inland Revenue of Cyprus has published a circular (2013/8) clarifying the regulation on the carry forward of tax losses. Taxand Cyprus discovers what this will mean for businesses.
Companies and self employed individuals are restricted to and can now only bring forward tax losses of the last 5 years, effective from the tax year starting 1 January 2012.
For example, for the tax year ending 31 December 2012, the tax losses that can be claimed against any taxable profits for 2012 are restricted to the tax losses brought forward from 2007 and onwards.
Additionally, no legal person will be penalized with a 10% additional tax in the case of claiming tax losses for more than 5 years in the assessment and submission of the temporary tax return for the year 2012, since the temporary tax assessment was made before the afore mentioned restriction came into effect.
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